What type of benefit does a disability income provision aim to provide?

A disability income provision is designed to provide a cash benefit to individuals who become unable to work due to a disabling condition. This financial support aims to replace a portion of the individual's lost income, helping them manage their living expenses when they cannot earn a paycheck. The key aspect of this provision is that it offers ongoing payments for a specified duration or until the individual recovers, emphasizing income replacement rather than just a one-time payment.

The focus on cash benefits aligns closely with the need for financial stability during a period of unemployment caused by disability, making this provision critical for individuals who rely on their income to support themselves and their families.

In contrast, the other options do not pertain directly to the essence of what a disability income provision offers. Life insurance payouts cater to the financial needs of dependents after the policyholder’s death, while retirement benefits concern income after reaching a certain age. Refund of premiums, on the other hand, relates to the return of money based on claims activity but does not directly address the need for income replacement during a disability. Lastly, tax deductions for premiums do not influence the immediate financial assistance a person receives in the context of disability, making them irrelevant in this context.